Aug 25, 2021
HR Management Issues and Emerging Global Trends
HR MANAGEMENT ISSUES AND EMERGING TRENDS: REFLECTIONS ON GLOBAL OIL AND GAS INDUSTRY
Oil and Gas (O&G) sector is one of the core sectors in India and has a very significant linkage with the entire economy. The industry caters to more than two- thirds of the country’s primary needs and it can be said beyond doubt that the industry has played a crucial role in putting India on the world energy map. (Source: India Brand Equity Foundation —IBEF website).
The energy demand of India is anticipated to grow faster than the energy demand of all major economies on the back of continued robust economic growth. The country’s share in global primary energy consumption is projected to increase by two-folds by 2035. (Source: IBEF website). Considering the same, the oil and gas sector is poised to play a very pivotal role in India’s energy security.
During the past decade, significant developments have affected the Indian O&G market, with vast consequences for the industry players, which include a focus on cost, efficiency, and speed of operations. These developments have posed enhanced uncertainties and challenges for the workforce in the Organizations operating in the sector. The main challenges associated with HR practitioners in Indian O&G sector include the following aspects:
• Large segments of workforce reaching retirement age, and with potential recruits remaining scarce, replenishment of skills and knowledge repository has been a huge challenge.
• Rapid Technological developments and globalization challenges.
• Diversity , Localization and Inclusion challenges as Organizations are going to explore new avenues & new geographies.
• The overall employment industry is witnessing significant shifts with the rapid rise of Open talent economy. As the O&G industry witnesses extreme pressures on account of the financial fronts due to fluctuations in the price of the oil market, freelancers and contingent employees are going to play an important role in the future. Another significant challenge is pertaining to multigenerational workforce.
There has been a continuous change in the workforce as well as pattern of working over the past several years. Some pre-dominant disruptions which have redefined the workforce include:
|Earlier Paradigm||Existing Paradigm|
|Work from 9 to 6||Reap collective intelligence|
|Control information||Reap collective intelligence|
|Physical presence||Virtual presence|
|Controlled culture||Flexible culture around work-life balance|
|Common needs and one size fits all||Personalized experiences|
|Work in silos and division of labour||Collaboration and multi-disciplinary teams|
The sector is evolving with an overall focus on efficiency and continuous improvements. HR professionals play a critical role in driving these internal activities as well as in the growth and expansion of an organization.
KEY EMERGING HR TRENDS AT GLOBAL OIL & GAS GIANTS
The future of HR in the O&G realm will be different and quite challenging. Today, the turbulent environment in the business world is described as VUCA (Volatile, Uncertain, Complex and Ambiguous). Considering the challenges elaborated in previous Section, it was considered prudent to explore the critical emerging HR trends followed by the organizations in Oil and Gas sector. (The details regarding HR practices have predominantly been gathered through the secondary data resources available on the Company websites, Annual Reports & Sustainability reports).
One important aspect which is common to almost all the major O&G organizations is that HR is gradually shifting its role in the Company to a proactive Internal Consultant. These Organizations periodically monitor and review their HR practices to meet the changing landscape of business. At ExxonMobil, the Review practice has been institutionalized and senior leaders of the Company make it a must to attend these sessions to share their knowledge and experience in formulation of key policy changes required in management of human capital.
Key HR management trends being followed in Global O&G giants to smoothly mitigate the challenges are mentioned below.
1. Challenge - Knowledge base Erosion
The challenge of Knowledge base erosion due to is being tackled by the Global Oil & Gas majors through effective implementation of the following initiatives:
a) Knowledge Management: There is a requirement of institutionalized Knowledge Management (KM) system to be in place within the Organizations to combat the depletion of Knowledge repository.
In the words of CEO- Schlumberger, Mr. D.E. Baird "We must become experts in capturing knowledge, integrating and preserving it, and then making what has been learnt quickly and easily available to anyone who will be involved in next business decision".
Schlumberger has in place The Schlumberger Knowledge Center ("The Hub"), an intranet and internet enterprise information network. The InTouch Knowledge Hub offers a single electronic interface for exchanging information between the field and its technology centres. It is a real time tool that helps capturing, managing, and sharing operations-related knowledge with the intent of faster and more reliable services for customers, accelerated product development, and significant financial benefits.
Further, Interactive sessions with the employees are facilitated at regular intervals in the Company to promote interpersonal effectiveness, exchange ideas and bring down the barriers to communication.
Other Oil Giants have also adopted and institutionalized KM initiatives. Through these initiatives, British Petroleum (BP) has estimated that knowledge sharing has cut its costs by -$700 million. Shell has estimated that KM initiatives has saved the company over $100 million a year. Shell’s KM Lead manager mentions that his experience of practice suggested that, in terms of the terms of value gained, 85% was derived from interpersonal discussion on the Knowledge management forums and only 15% from the knowledge base available in the portal.
b) Career Management: It is noted that the Oil majors are actively carrying out Career Management of employees through planned Job rotation and linked Talent initiatives among the employees.
At Schlumberger, Job rotation policy is implemented to give the engineers hands on
experience on different work modules. Flexible lateral job rotations are offered to employees across segments to succeed in making each personnel a generalist and a specialist at the same time. At Saudi Aramco, the Job rotation and linked training initiatives are carried out in a planned manner online. Aramco has carried out more than 25,000 job rotations in support of employee development plans.
c) Mentoring: Mentoring is also one such intervention which the Oil Majors have started adopting for effective transfer of knowledge. British Petroleum has in place ‘Mentor match’, a one-year annual program which provides one-to-one mentoring to the identified high-potential employees to ensure them for development of Leadership positions. This program is in addition to the ‘Accelerate’, a global program to support employees as they transition into leadership roles. Two-way mentoring is also in novice stage in the Organizations.
2. Challenge - Digital First Challenges
Today, the world is being transformed by technologies that are redefining customer expectations, redefining industries, deriving new business models and changing the way people work.
Robert Bolton, Global People and Change Centre of Excellence, KPMG, states that “Although it may not be happening quite so quickly with O&G sector as in other industries, technological disruption is already underway, HR executives in O&G don’t have the luxury to sit back and wait to respond. They need to begin systematically planning what the workforce of the future needs to be, and shape their strategies to create that workforce."
In the Oil and Gas sector, Technological transformation is focused on emerging technologies such as Artificial Intelligence (AI), Robotic Process Automation (RPA) and the Industrial Internet of Things (IIoT).
Two major trends towards combating the Digital challenges include the following aspects:
People Analytics : Use of Big data & Advanced Analytics to accurately predict measurements, outcomes and insights for better decision making
Digital Transformation: Technologies being extensively used for HR services: Tailored career development, Digital on-boarding, Employee & workplace concerns
Leading organizations within the O&G sector are starting to effectively use Data analytics to help identify, recruit, retain, and develop skilled talent. By blending internally available data with external statistics and information related to the labour supply, HR leaders are positioning themselves to manage changes brought forth by volatile operating environment. Further, the Organizations are increasingly opting for video interview processes. The same gives them access to a wider talent pool of candidates, specifically in case of contractual positions, as well as leading to monetary savings.
The digital tools are enabling HR with the means to deliver individualized, just-in- time, and forward-looking interventions, while artificial intelligence and automation has begun to release HR from transactional services and simple judgment- or expertise-based tasks in these Organizations. The HR teams are increasingly de- emphasizing past data and working towards the availability of Real-time data for all the Department heads. With the help of HR Analytics tools, the Organizations are going for Targeted retention plans and succession planning.
ExxonMobil, in order to attract top talent as well to better connect with prospective employees, has developed Digital recruiting application which is available to both recruiters and candidates on mobile devices. Prospective employees can access information on the company, potential career paths, and benefits before they talk to recruiters. This allows interviewers to maximize their time with candidates, focusing on the most important concerns of job candidates.
The Oil & Gas majors are also finding innovative ways to capitalize on the benefits of Virtual Reality (VR) technology for training and simulation purposes. Shell is using virtual reality techniques for deep water safety training to its employees.
Baker Hughes is deploying VR technology to simulate oil and gas facilities in training rooms. It offers a higher level of clarity during training programs.
Considering technological advancements, Telecommuting option has also been in practice at the Organizations. At ExxonMobil, Telecommuting option is available for certain positions (Administrative and Marketing positions). Some campuses of the Company like Houston campus, allows employees to avail work from home option. ExxonMobil designs and regularly organizes Disease prevention and control programs in assistance with Healthcare institutions to address health risks associated with Virtual workplace.
However, combined with virtual workspace is cyber security problems. At Shell, considering the increasing role of digital technologies across the business as well as HR operations, cyber-security attacks could cause significant harm to the Company in the form of loss of productivity and loss of intellectual property. Hence, the employees and contract staff are subject to mandatory courses aimed at protecting against cyber threats. Similarly, at ExxonMobil, in 2018, all of the employees completed web-based cyber security training to help them identify and respond to potential cyber security risks and to reinforce safe behaviours.
3. Challenge - Inclusion and Cultural adaptability
The Organizations are today facing challenges associated with Diversity , Localization and Inclusion as they explore new avenues & new geographies. Global Talent markets are becoming increasing complex as diverse employees bring own expectations regarding collaboration, adoptability and accountability. To combat the challenges posed due to the Inclusion and cultural adaptability, the Global majors have embarked various initiatives as detailed ahead.
Shell has started an initiative called "I’m Not OK" to promote open and honest conversations of employees about their mental health to enable them to get the support they need while struggling with work performance. Further, at Shell, specific Employee Network Sessions are conducted, wherein, female senior management engage with women employees informally to provide them an opportunity to communicate about gender-specific topics. Senior management involved in these engagements exercises note the opportunity to enrich their understanding of the female perspective within Shell as well as the depth of talent and effectiveness of Shell’s Diversity and Inclusion initiatives.
Talent management team at British Petroleum has collaborated with Disabled consultancy groups to increase connect with the prospective disabled employees of the Organization. The exercise helps the recruiters to understand the specific requirements of prospective disabled candidates in the overall hiring process.
At ExxonMobile, Inclusive Policies are in place that encourage diversity. The emphasis is to ensure that each employees suggestions are valued as Diversity breeds Innovation.
4. Challenge - Engagement of New Workforce
As the Organizations are bracing up for an increased mix of Millennials in the workforce and considering that the future workforce will not be tied with geographical office boundaries, an increased emphasis is being given in these Organizations on measures of employee engagement. Today the Millennials are representing more than half of the workforce.
The predominant themes involving future workforce include the following aspects:
• Fluid teaming: Teams form and dissolve on a timely basis; individuals work across many such projects over period of time.
• Loose hierarchies: The organization is built around tasks and projects, rather than rigid hierarchies.
• Instant feedback: Performance management is crowd sourced in real time rather than being conducted through an annual conversation with a single manager.
In order to monitor productivity issues and keep track of the employee engagement, British Petroleum monitors employee opinion annually via 'Pulse' survey. In order to improve engagement scores, British Petroleum has launched global commitment program for minimum mandatory parental leaves for parents. The policy has been established through employee forums, including working parents’ forum in place at the Organization. BP also actively carries out mandatory training in Diversity and inclusion for its senior leaders.
Creating positive engagement through a culture of continuous improvement is a top priority for HR professionals at BP. The company places greater emphasis on driving continuous improvement in skills and capability. BP has in place ‘Competency-on-line’, an online tool wherein employees can access the skills and competencies required for a particular role in business units. The tool also guides the employees for acquiring such competencies. Personalized career paths are also available for key employees to provide tailored development.
At Saudi Aramco, over 60 percent of Company’s workforce is composed of Millennials. To ensure that this generation is actively engaged and unique voice of this generation is captured, Young Leaders Advisory Board (YLAB) is in place. It acts as a bridge between the youth of Saudi Aramco and its Executive management. The team comprises of part-time young employees who remain embedded in their home
departments and provide ideas and insights directly to senior management as well as engage with other young employees on the changes taking place throughout Saudi Aramco. The CEO Youth Town Hall meeting is also organized by the YLAB team, giving Millennial the chance to engage with CEO directly.
Considering the key practices and trends being followed at the Oil and Gas giants to combat the four key challenges faced by them, as elaborated above, we — the Indian O&G HR fraternity are expected to continuously relook the existing strategies which have helped us to succeed in the past, in order to remain competitive and succeed in future. As HR functions gradually become automated to cater to multi-generation workforce in our Organizations, we- the HR specialists need to broaden HR thought process as well as need to grasp the overall business strategy in place at our Organizations. All signs indicate that going forward, HR practices in the Indian O&G sector will look dramatically different and the HR leaders will not only help in executing business decisions; but they will also help in making those decisions.
Photo by Andrew Butler on Unsplash
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